Paying for the surprises

School panel grapples with unexpected expense for EHS electrical update

May 1, 2013

A massive renovation of an older facility is sure to come with some unforeseen costs.

That's what the Physical Plant and Facilities Committee of the Warren County School District's board of directors grappled with Monday night regarding the Eisenhower project.

Part of what the Eisenhower project will bring is a "total reworking of the electrical system in that facility," WCSD Director of Buildings and Grounds Dr. Norbert Kennerknecht said.

As part of that process, Penelec will be installing new underground conduit, removing two poles, installing one pole and replacing the transformer. "Penelec is seeking an easement to permit their workers to be on our property," Kennerknecht explained.

While the supplies, including the transformer, will be provided at no cost to the district because Penelec owns the poles, Kennerknecht said the utility company is still seeking $27,000 "to provide the work that they have to do."

The question that arose was how to pay Penelec.

"We do have a contingency within QZAB (Qualified Zone Academy Bonds) to pay for it or we could pay it out of capital reserve," said Kennerknecht.

Qualified Zone Academy Bonds are low-to-no interest federal bonds that have been procured to pay for the costs of renovations.

Board member John Grant asked if the easement could be offered for $27,000.

"They are doing work," Kennerknecht said, explaining that Penelec will provide heavy gauge wire as well as the transformer. "It's better that Penelec owns the transformer," he said.

When asked if paying the $27,000 from the QZAB contingency could impact future project funds, Kennerknecht said, "There's a possibility."

He explained the payment could be split between QZAB and capital reserve.

"It's within our contingency we reported to PDE (Pennsylvania Department of Education)," he said. "If we run short of our contingency later on, (we will) have to borrow more in the clean-up bond. There's a lot of unknowns."

"I would prefer to pay it out of capital," he said, citing future flexibility as the reason.

The committee forward both requests, the easement and payment from the capital reserve, to the full board for action.